NEW YORK (Dow Jones)--Treasurys rose Tuesday, boosted by haven demand on geopolitical tensions in the Korean peninsula and continued worries about
sovereign debt problems in the euro zone. As of 9 a.m. EST, the benchmark 10-year Treasury note was 17/32 higher to yield 2.937%. Bond prices move
inversely to their yields.

Riskier assets including stocks and crude oil dropped while the euro fell against the dollar. In contrast, German bunds and U.K. gilts rose along with
Treasurys. "It is flight to safety," said Lou Brien, a market strategist with DRW Trading Group in Chicago.

Investors sought safety in low-risk U.S. government debt after North Korea fired artillery rockets at an island near a disputed maritime border. Two
South Korean marines were killed when North Korea and South Korea exchanged fires.

(Reuters) - U.S. Treasuries rose to a
one-week high on Tuesday, benefiting from a flight to safety after reports of North Korean shelling of South Korea and instability in the euro zone as
Ireland fell into political disarray.

Well there are many ways we could interpret this, but my sneaky suspicion is that China gave N.Korea the nudge under the table to stir up some
fear/conflict to intentionally spark a sell-off with the S.Korean Won and a flight to the dollar.

The fed's recent $600 billion package that would devalue the dollar was a slap in China's face for not letting the yuan rise. It makes sense since
China holds the largest portion of U.S treasuries in the world and they do NOT want to be bullied into having less value.

A weak dollar would be better for trade from the US stand point and keeping the dollar weak is why China is at odds with our monetary policy. A
stronger dollar is better for china and the rest of the world as their eports become cheaper on the American market.

It is interesting. Our little money squabble with the Chinese could be influenced by the uncertainty of war in Asia. Wonder if they will catch on. . .
Or if they are pulling the strings to manipulate the market in their favor. . .

Related News

St. Petersburg, Russia - China and Russia have decided to renounce the US dollar and resort to using their own currencies for bilateral trade, Premier
Wen Jiabao and his Russian counterpart Vladimir Putin announced late on Tuesday.

Very interesting thread Slayer as I can expect when you throw something out. It seems to fit into Chinese thinking. Way too many things seem to have
been going on the past month or so hmm

Will the next piece put into play be Iran or our good buddy Chavez? Or will we be seeing more from
China and Russia? I got to wonder about the LA "missile" in light of recent events. The game seems to be harder to hide.

Congressman Ron Paul speculated on the Alex Jones Show today that the war footing between North and South Korea could be an orchestrated crisis
to boost the dollar and reverse the US economy, paralleling the RAND Corporation’s call two years ago for the United States to become embroiled in a
major war as a means of preventing a double dip recession.

Tensions are running dangerously high after North Korea’s military vowed a “merciless military strike” and South Korean President Lee
Myung-bak ordered his military to strike North Korea’s missile base around its coastline artillery positions if the North made any further moves.
Japan announced that it was preparing for “any eventuality” while Russia said the events represented a “colossal danger” to peace in the
region. Stock markets sank worldwide while the dollar and gold bullion rallied in response to the news.

IMO if the events in the UST market were linked to current matter in Korea and the Eurozone, I would have suspected UST yields to drop as
international investors rush to the US in a flight to safety and therefore BUY the UST, not sell it as is happening overnight.

Yield rise is likely linked to speculation of some firming on the US economy.

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